HHS Announces Intent to Exempt Some Self-Insured Plans from Reinsurance Fees

Yesterday, the U.S. Department of Health and Human Services (“HHS”) published a rule finalizing a number of policies related to the implementation of the Patient Protection and Affordable Care Act (“Program Integrity Rule”).  In the Preamble of the Program Integrity Rule, HHS indicates that it plans to propose future rulemaking to change how the $63 per covered life reinsurance fee will be collected, and that certain self-insured, self-administered plans will be exempted from the fee for 2015 and 2016 benefit years.

Employers that self-insure will still need to pay the transitional reinsurance fee for 2014. A blog that discusses transitional reinsurance fees can be found here.  For 2015 and 2016, it is not clear at this time how broadly HHS intends to apply the exemption.

With regard to the collection of the reinsurance fees, HHS states that to alleviate the upfront burden of the reinsurance contributions, HHS intends to adopt a new payment schedule and collect reinsurance contributions in two installments.  First, the reinsurance contributions for reinsurance payments and administrative expenses would be collected at the beginning of the calendar year following the applicable benefit year.  Second, the contributions for payments to the U.S. Treasury would be collected at the end of the calendar year following the applicable benefit year.

The Program Integrity Rule can be found here.

About Bose McKinney & Evans LLP

Bose McKinney & Evans LLP is a business law firm, headquartered in Indianapolis, Indiana, serving both publicly held and privately held businesses, governmental entities and high-growth industries. Our clients include Fortune 100 companies, international manufacturers, national and regional financial institutions, agribusinesses, sports teams, university-incubated start-ups, media, utilities, cities and schools, to name a few. We strive to build strong relationships with our clients as key business advisors, to exceed expectations in the quality of our work, to be knowledgeable about our clients’ businesses and sectors, to be responsive to service needs and to continually seek to improve the delivery of client services. Our ultimate focus is on our clients.
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